OOCL PARENT COMPANY RETURNS TO PROFIT
Orient Overseas (International) Ltd., the parent company of OOCL, reported net profits attributable to shareholders of $62 million for 1999, as compared to a net loss of $300,000 in 1998.
The results for 1999 mark a return to the black for the Hong Kong-based shipping group, following a small deficit in calendar 1998 and in the first half of 1999.
Annual operating profit for 1999 was $111 million, an increase of 131 percent on the $48 million profit for the previous year.
Revenues increased by 17 percent last year, to $2.1 billion, from $1.8 billion in 1998.
Pre-tax profit was $75 million, as compared to $4 million in 1998.
OOCL said that its transpacific and Asia/Europe container services returned to profit last year, but the transatlantic trade lost money because of rate levels that were “the lowest revenue per TEU in more than a decade.”
C. C. Tung, chairman and chief executive officer of Orient Overseas (International) Ltd., said: “We achieved freight rate increases in 1999 for cargoes from Asia to North America. A similar pattern emerged in the Asia-Europe trade and freight rate increases were achieved in increments over the second half of the year for cargo outbound from Asia to Europe.”
Tung added that container shipping will continue to account for 90 percent of the revenues of the group. “The general trade outlook at this point is positive,” he said. However, Tung warned that the outlook for containerized transportation will be “significantly less positive” if the U.S. economy slows down more than expected.
The OOCL group’s terminals in North America continued to produce good results, the company said.
OOCL is the third major containership operator, after Hanjin Shipping and Hapag-Lloyd, to report a strong recovery in profits, following years of lackluster financial results for most carriers. Neptune Orient Lines, the parent company of APL, will report its 1999 results on March 27.